cover story

32 1989 - 2014 25 years of publishing excellence Atlantic

disconnectBy Wade Kearley

The sea oh the sea, the wonderful sea, Long may she roam between Nations and me. Everyone here should get down on one knee And thank God we’re surrounded by water.

That’s one version of the chorus from Tom Cahill’s 1950s song, “Thank God We’re surrounded by Water.” A journalist and playwright, Cahill was keenly attuned to the political tide in Newfoundland. Many people in the newly minted province embraced the traditional view of the ocean as protector and ally. But that was before the 1990s collapse of the ground fi shery... before the long battle with Ottawa for rights to the vast offshore oil resources... before the tragic sinking of the Ocean Ranger drill rig... before the scaling back of the Coast Guard and search and rescue services... before frustrations with ferry services reached the present high-water mark. Today there are signs that there is a new attitude afl oat, one in which the ocean is primarily a barrier to prosperity, something to be bridged or tunneled under. We have the technology to make the connection, but at what cost?

Mar/Apr 2014 atlanticbusinessmagazine.com 33 Yvonne Jones, Liberal MP for “ I don’t feel there has been any effort Labrador, has seen life improve for the people served by this year-round ferry put into looking at the feasibility of a service but, she says, more needs to fixed link between Labrador and the be done. Speaking by telephone from her Happy Valley-Goose Bay office, island. This is a necessary piece of Jones says that despite the ferries and the Trans Labrador Highway, the infrastructure to grow in the future.” people of Southern Labrador remain Yvonne Jones, Liberal MP for Labrador isolated. “Air transport isn’t affordable and ferries are unreliable,” she says. “We like to blame governments and The Government of Newfoundland depth of 70 metres, two kilometres operators but those services are and Labrador has the throttle wide out from Shoal Cove on the island and limited by high winds, tide, and ice.” open on the Muskrat Falls Hydro 1.5 kilometres from Forteau Point in She believes a fixed link tunnel under project, including two submarine Labrador. the Strait of Belle Isle is the answer. links, one 500 megawatts across the This is the first phase in the Nick McGrath, MHA for Labrador Cabot Strait to Nova Scotia and the construction of the Labrador West and Minister of Transportation other 900 megawatts across the Strait Island Link (LIL), a 35-kilometre, and Works, admits the Province won’t of Belle Isle from Labrador. For some, $700-million set of three marine conduct a fixed link feasibility study dissatisfied with ferry service to power cables across the Strait of Belle (estimated to cost $15 million) until Blanc Sablon in the north and North Isle. This link, in turn, is a key part of Route 138 along Quebec’s North Shore Sydney to the south, the economics of the $7.8-billion Muskrat Falls hydro is extended to Blanc Sablon. McGrath integrating the cable across the Strait development that, at its conclusion, is an affable man, tall with grey of Belle Isle with a fixed link tunnel will help integrate the hydro power flecks in his black hair. His gravelly under the Strait, presents what may of Newfoundland and Labrador and voice is disarming. A newspaper on be the last opportunity for a more connect the island to the North his table features a large picture of substantial connection between the American power grid for the first time Kathy Dunderdale announcing her island and the mainland. There are in its history. retirement. He turns to toss the paper others who say that the only real Fifty kilometres south of the Shoal onto the window sill, hesitates and opportunity for a fixed link will come Cove drill site is the small community then tosses it instead onto the blotter when Quebec extends Route 138 all of St. Barbe. From here, Labrador of his neatly arranged desk. From his the way along Quebec’s North Shore Marine Inc.’s 108-metre-long MV sixth-floor west block office, we have to Blanc Sablon. Still others argue Apollo ferries surface freight and a commanding view of the parking lot that, not only is the fixed link too passengers to and from Blanc Sablon below. He sits, arms and legs relaxed, expensive, so too is the Muskrat Falls on the Quebec-Labrador border. at the small side table. connection. Certified to carry 240 passengers, McGrath is convinced the Province 220 cars and six tractor-trailers, the has taken the right approach to Apollo makes as many as 16 trips improve transportation in Southern Tunnel vision daily during the peak tourist season. Labrador. In the late fall of 2013, From opposite sides of the Strait In late winter, service is curtailed to his department issued a request for of Belle Isle, the carbide steel tips of as few as one trip each way until ice proposals (RFP) to upgrade the Strait two shore-based directional drills are becomes too heavy and service shifts of Belle Isle ferry services. “This is a grinding towards each other in the 300 kilometres south to Corner Brook unique RFP. Rather than just calling bedrock 20 metres below the seabed. where the Sir Robert Bond takes over for a replacement ferry, we want the These will eventually emerge at a the service. proponents to improve the freight,

Icebreaker clearing a path for the MV Apollo. Scenes like this explain why ferry service between Labrador and Newfoundland is sporadic in the winter months.

34 1989 - 2014 25 years of publishing excellence per cent” and constant delays. “So I wouldn’t use the passenger service and reservations,” amount of time required for a feasibility study as an he says. The RFP closed at the end $7.8 excuse for not looking at the advantages of combining of February and the new service is the fixed link and the transmission lines.” expected to be in place sometime in The concept of constructing a Newfoundland- 2015 and will run to 2030. The 15-year billion Estimated Labrador fixed link to bridge the Strait isn’t new. A term suggests that the government does keen proponent of the concept for more than 40 years, not see the LIL as an opportunity to cost to mining engineer Tom Kierans brought impressive consider a fixed link in the Strait. develop credentials to his lobby efforts. He worked in the For Yvonne Jones, this is not enough. mining industry and academia and he played a key “I don’t feel there has been any effort Muskrat Falls role in building the Upper Churchill hydroelectric put into looking at the feasibility of a project project. Kierans first proposed the link in the 1970s to fixed link between Labrador and the bring hydro power from Churchill Falls to the island. island. This is a necessary piece of Premier Frank Moores paid some attention to the idea infrastructure to grow in the future. in the lead-up to his election in the mid-1970s. We need to give the fixed link a serious In 1993, Kierans was back with a revised concept: look.” According to a prefeasibility study an immersed tunnel of prefabricated sections buried completed a decade ago, the fixed link on the ocean floor that would include a traffic tunnel tunnel would take about five years of $15 and power cables. Kierans presented a refinement planning and ground work to satisfy the of his earlier concept, and a model for how it might requirements of existing legislation and be financed to the 2003 Transportation Association regulations and another five to six years million of Canada’s annual conference. He wrote: “In ferry to complete. Estimated cost tolls, import-export shipping costs, lost tourism, and “This doesn’t have to be a lost for a fixed no Labrador hydropower, the missing link now costs opportunity,” says Jones. “Government is island residents an estimated $290 million/year. A living in a cloud if they think they will link feasibility proposed immersed rail tunnel’s one-billion-dollar bring Muskrat Falls in on time and on study capital cost, if amortized over 40 years, plus operating budget... No one should be expecting charges, could total only $70 million/year. Thus, power to be online by 2017.” She says island residents are now paying about $220 million/ that “statistics world wide” show year more than the estimated annual cost to build and megaproject “cost overruns of 20-40 operate the tunnel.”

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Mar/Apr 2014 atlanticbusinessmagazine.com 35 ATLANTIC OCEAN

LABRADOR

Happy Valley - Muskrat Goose Bay Falls Churchill Falls

Gull Island

NEWFOUNDLAND St. John’s Bottom Brook Granite Soldiers Canal Pond Cape Ray

Cape Breton

P.E.I. Labrador - Island Transmission Link

NEW Maritime BRUNSWICK Transmission Link Existing AC NOVA SCOTIA Transmission Lines

MAINE Halifax AC Transmission - Muskrat Falls to Churchill Falls

Potential NS-NB Interconnect Upgrade

Subsea Component of Link

36 1989 - 2014 25 years of publishing excellence “ We will never be equal Muskrat Falls as Canadians until we have Project a fi xed link.” Burford Ploughman, one of three commissioners with the 1978 Report of the Commission of Inquiry into Newfoundland Transportation Muskrat Falls Generation A few weeks later, Progressive infrastructure. Burford Ploughman 824 MW hydroelectric Conservative leader Danny Williams was one of three commissioners. facility; 4.9 TWH/yr ATLANTIC OCEAN promised a prefeasibility study if Seated at the kitchen table in his party was elected. Following the his modest retirement condo in Labrador-Island election, in keeping with the new St. John’s, Ploughman pulls out a Transmission Link Premier’s promise, the Department of well-thumbed copy of the Sullivan LABRADOR 900 MW capacity Transportation, Works and Services Report and, turning to page 216, charged the Public Policy Research points to a recommendation Muskrat Falls to Soldiers Pond Centre at Memorial University, under urging the provincial government Happy Valley - Muskrat near Holyrood interim director Dave Vardy, with to immediately proceed with the Goose Bay Falls 1,100 km, including 35 km responsibility for an independent study. construction of a fi xed link tunnel across the Strait of Belle Isle Engineering fi rm Hatch Mott under the Strait of Belle Isle. Churchill from Forteau Point to Shoal Cove MacDonald won the contract Over the years and despite the Falls and submitted their fi xed link Williams’ government’s dismissal Maritime prefeasibility report in 2004. They of the link, Ploughman continued Gull Transmission Link recommended a rail line through lobbying premiers and federal Island a tunnel bored beneath the Strait cabinet ministers alike. 500 MW capacity of Belle Isle (similar to the chunnel In 2007, at the invitation of Includes 180 km between England and France ) Armand Joncas, mayor of Blanc undersea link from Cape Ray, NL as the most feasible fi xed link Sablon, he joined the Neighbours NEWFOUNDLAND to Cape Breton, NS option. However, at an estimated without Borders Coalition. St. John’s cost of $1.7 billion, the consultants Disappearing into his condo, felt the benefi ts didn’t justify the Ploughman returns with a four-page Bottom construction costs and recommended business plan prepared for this Brook that it would be more prudent to affi liation of towns and development Granite Soldiers upgrade ferry service. groups. It describes the case for Canal Pond Williams’ support was muted. completion of Highway 138 along He said the tunnel was technically Quebec’s north shore to Blanc Sablon Cape Ray feasible but was, “a long-term and the fi xed link tunnel. proposition and a national project Ploughman’s argument is that will need a signifi cant infusion underpinned by an estimated of fi nancing from the federal reduction of $1.9 billion in subsidies government.” He added that, over the next 20 years for ferry “Though not an immediate priority of services. That includes removing Cape Breton government, the possibility remains one of the super ferries from the that a fi xed link could be constructed fl eet maintained by the federal during the completion of projects government across the Cabot Strait P.E.I. Labrador - Island Transmission Link such as the Lower Churchill hydro and eliminating Quebec’s weekly development or Highway 138 in ferry service along the North Shore as NEW Maritime Quebec.” The only way traffi c could well as Newfoundland and Labrador’s BRUNSWICK Transmission Link be generated to justify this cost daily service across the Strait of Belle would likely be if the Marine Atlantic Isle. There was little or no response Existing AC service was shut down to drive traffi c from governments. NOVA SCOTIA Transmission Lines north to the fi xed link. Government Ploughman’s frustration is MAINE Halifax AC Transmission - buried the idea. palpable. “We are the last province Muskrat Falls to Churchill Falls The fi xed link was also in Canada with no road connection recommended in at least one to the rest of Canada,” he says. “Even Potential NS-NB government commission. The 1978 Prince Edward Island, with one Interconnect Upgrade Report of the Commission of Inquiry quarter of our population, got the into Newfoundland Transportation Confederation Bridge at a cost of $1.3 Subsea Component of Link (known as the Sullivan Commission), billion.” Ploughman pauses, “We will suggested that the fi xed link never be equal as Canadians until Source: Nalcor was a key piece of the province’s we have a fi xed link.”

Mar/Apr 2014 atlanticbusinessmagazine.com 37 per cent and commercial vehicles were up 27 Car wait 20 per cent. Despite the growth, overall traffic minutes is low. In 2004, the last year the consultants reviewed, 24,042 private and commercial car wait 20 vehicles made the crossing. That’s an average minutes car… 1.3 of 66 vehicles a day or one vehicle every 20 The distance from Quebec City minutes, 24/7. to St. John’s on the Trans-Canada billion These numbers are dwarfed by P.E.I.’s Highway through the Maritimes Confederation Bridge. Opened in 1997 for is 2,300 kilometres, not counting dollars $1.3 billion, this 12.9-kilometre long bridge the distance across the Cabot Cost of brought a one-time boost of 30 per cent in Strait. Making the same journey traffic, after which numbers stabilized. In via Labrador, along Quebec Route Confederation 2012 there were close to 1.4 million crossings. 138 to 389 to the northeastern Bridge, P.E.I.’s That’s an average of 3,836 vehicles a day or community of Fermont, then onto one vehicle every 23 seconds. That same year, the Trans-Labrador highway, adds fixed link to the Woods Island ferry at the other end of the 700 kilometres to that distance New Brunswick province served 160,000 vehicles including — not to mention the aggravation 15,175 commercial trucks. All this for a total of tailgating logging trucks and population of less than 150,000 people. substandard roads. And then there Travelling from Halifax, however, the fixed is the Apollo ferry ride with its link route is more than 1,000 kilometres seasonal limitations. longer one-way to St. John’s than Marine However, if Route 138 were 145,273 Atlantic’s ferry connection to Port aux extended across the 300-kilometre Population of Basques. Enshrined in Newfoundland’s Terms gap to Blanc Sablon and all Prince Edward of Union with Canada, this ferry service sections were upgraded to enjoys strong demand. In 2011, Marine highway standards and a fixed Island Atlantic’s gulf class super ferries set sail more link was in place, then the than 2,000 times carrying a total of 131,597 distance of 2,400 kilometres passenger vehicles, 100,620 commercial from Quebec City to St. John’s is vehicles and 382,522 passengers. comparable to the Maritime route, minus the ferry delays. Such a scenario would be irresistible to trucking companies operating west of the Maritimes Now whose and shipping into Newfoundland 526,702 fault is that? says Gordon Peddle, former chair of In October 2013, during his failed bid for the Atlantic Trucking Association. Population of leadership of the provincial Liberals, Danny Peddle has taken the call on his Newfoundland Dumaresque visited tunnelling projects in cell phone by mistake and he only and Labrador Norway. On his return Dumaresque told local has a few moments to talk as he media: “We could have two tubes, 28 feet makes his way between meetings wide, two lanes each way, for road traffic for somewhere in the Maritimes. a total of $496 million,” less than one-third of “Most of the food shipped into the estimated cost in the prefeasibility study. Newfoundland comes out of David Vardy dismisses these numbers. distribution centres in Quebec and An economist by trade, Vardy oversaw Ontario and from produce centres 1.7 the prefeasibility study on behalf of out of the United States,” explains the Department of Transportation and Peddle. That accounts for “about billion understands the complexity of the issues. 70 per cent of all the tractor- He says the difference in cost is not due to trailers crossing the Cabot Strait.” dollars technology but to the underlying geology. “In Peddle says, “If you can save time, Estimated cost Norway they drill through solid granite. But in travelling all the way by road, the bedrock under the Strait there are many assuming distance is relatively to construct a geological faults,” he says. equal, then that is the route the fixed link tunnel This is supported by the prefeasibility traffic would take.” connecting report which discovered that a 1980 study In conducting the prefeasibility by SNC-Lavalin determined that “water wells study, Hatch Mott MacDonald Newfoundland drilled through such [fault] zones have been reviewed ferry traffic statistics and Labrador productive with an estimated capacity of over across the Strait of Belle Isle for 45 litres per minute while those drilled away four years in the early 2000s: from the fault zones were dry.” passenger traffic was up 59 per Despite the provincial government’s cent; vehicular traffic was up 76 unwillingness to move on a feasibility study

38 1989 - 2014 25 years of publishing excellence for the fixed link, Minister McGrath from the Churchill Falls hydro dam, fixed link or anything else, or whether says it should be a national priority. water flow is ultimately controlled it is a millstone around the necks of “I’m confident that at some point in by Hydro Quebec with whom Nalcor ratepayers in Newfoundland. Canadian history, Newfoundland Energy, Newfoundland and Labrador’s For this overall price tag, the project should be joined by fixed link to the energy utility, has no formal water includes not only the dam and power rest of the country.” management agreement. Nevertheless, plant but also three transmission lines Nalcor selected this site for the four- that will connect the Lower Churchill turbine hydroelectric dam. Having and the island of Newfoundland to cleared environmental and financing the North American power grid in a Connecting hurdles, and with aboriginal new electricity loop that fuses a 35- the energy loop negotiations “well under way”, year partnership between Nalcor and Mist spatters the lens as the camera the project was sanctioned by the Emera. pans across the rocky shoreline and provincial government in December The deal will be consummated with over a mighty river where water 2012. construction of the most controversial surges around a huge granite outcrop By 2017, Nalcor plans to have two of the three Muskrat Falls transmission and plunges 15 metres into seething dams and a powerhouse here which lines, a 500-MW submarine foam on the way to Lake Melville. will generate 824 megawatts (MW) power line between southwestern This is Muskrat Falls, 25 kilometres of hydroelectricity. Known as Phase Newfoundland and northeastern Cape west of Happy Valley-Goose Bay on One of the Lower Churchill Project, the Breton. the lower Churchill River. Fed by the Muskrat Falls hydro development is an Recently approved by Nova snow and rain from the vast interior historic and controversial megaproject. Scotia’s Utility and Review Board, of Labrador, the river spills an average Including the Maritime Link (100 per this $1.58-billion transmission line, of 1,740 cubic meters per second (m3/ cent owned by Nova Scotia’s utility, known as the Maritime Link (ML), will sec.) over these falls. At spring flood, Emera Inc.), it will cost a minimum be managed by Nova Scotia Power - water volumes reach 6,820 m3/sec. of $7.8 billion. At that price, even Maritime Link Inc. (NSP-ML), a wholly- That’s higher than the annual average with the creation of approximately owned subsidiary of Emera. of 5,880 m3/sec. for the Niagara River. 2,000 jobs annually for five years in According to Nova Scotia’s However, water volumes as low as 253 more than 70 trades, some question Department of Energy, power from m3/sec. have also been recorded here. whether the Muskrat Falls hydro Muskrat Falls will supply up to 10 per Since Muskrat Falls is downstream project is the last opportunity for a cent of that province’s energy needs —

Thank You for helping us raise $144,000

Mar/Apr 2014 atlanticbusinessmagazine.com 39 enough electricity to power 100,000 The third and longest of the three Newfoundland and Labrador Hydro, homes. Emera also plans to import Muskrat Falls transmission lines is Vardy is one of the Muskrat Falls hydro over the Maritime Link from the the 1,100-kilometre Labrador-Island project’s most active and informed existing Churchill Falls power plant connection (a $2.6-billion extension critics. in Labrador to replace up to 30 per cord between the Lower Churchill For Vardy, a huge red flag on this cent of Nova Scotia’s present electrical Project and Soldiers Pond, near St. deal is Bill 61, passed in 2012 by needs. How does this compare with John’s). In central and southeastern Newfoundland and Labrador’s House the benefits for Newfoundland and Labrador, the 400-km transmission of Assembly. He says the bill grants Labrador? line will cross 194 rivers and streams Nalcor a monopoly on power on the “The way you compare benefits is including the Kenamu River and island. The legislation says that Nalcor the cost projections that were put on St. Paul River. On the island, 700 km of has the “exclusive right to supply, the table,” says David Vardy. Those transmission lines will span 392 rivers distribute and sell electrical power or projections were for the costs of the and streams before it reaches Soldiers energy to a retailer or an industrial New England spot market electricity Pond. There the power will enter customer.” At a time when the island (“real-time” market for wholesale the provincial grid for distribution to of Newfoundland is about to connect electricity to meet projected demand) ratepayers. to the North American power grid which he says were projected to reach and create new opportunities for anywhere from five to nine cents per energy entrepreneurs, the House of kilowatt hour (kWh) during the life of Assembly has passed a law forbidding the agreement. A real jolt “industrial customers on the island “Newfoundlanders will be paying “Hearing Danny Williams the day portion of the province ... to develop, more than 21 cents. And that is he said that this province is going own, operate, manage or control a before Newfoundland Power adds to develop Muskrat Falls put a shiver new facility for the generation and on its distribution costs,” says Vardy. through my spine,” says Vardy. It’s supply” of electrical power, either for Currently on the island, where thermal 11:00 p.m. but he is returning my call its own use or for sale to the grid. generation accounts for more than and he is... animated. A former clerk of Executive half of the power supply, he says the His biggest objections to Council (the body responsible for the rate is about 12 cents per kWh. Hydro Muskrat Falls are the cost and the overall operation of the provincial power in Labrador is much cheaper way the project has been sold to government, including decision- says Vardy: “In Labrador West, where Newfoundlanders and Labradorians making, planning, formulation of the power is supplied by the Upper as a good deal “even though all the policy and the general development Churchill and where generation costs risk is loaded on local ratepayers.” of provincial resources), Vardy claims, one quarter of a cent per kWh, the rate He’s appalled at how the terms of “the legislation contradicts the rules is around four cents.” the Energy Access Agreement (EAA) which the Province used to argue The most straightforward of the between Nalcor and Emera Inc. are our case against Quebec.” These three Muskrat Falls transmission lines, weighted in favour of Nova Scotians, rules, imposed by the Federal Energy in terms of physical components, is and how, in his opinion, the cost of Regulatory Commission (FERC), a the $700-million line extending 250 that deal has been foisted onto the power utility regulator in the United kilometres west and north to connect shoulders of ratepayers on the island States, require that suppliers who with the Churchill Falls generating of Newfoundland. generate energy and transmit it into station. This line will enable power “This will double our debt. This is the American grid, provide open exchanges between the Upper and $20,000 for every man, woman, and access to their transmission lines. Lower Churchill systems and provide child — and that is if we hold the costs Nalcor used this argument to gain back-up power. to $10 billion. It could go up,” says access through Quebec for up to 250 Vardy. He tosses around terms such as MW of surplus power from the Upper terawatt hours (TWh) and megawatts Churchill. And now, says Vardy, they as if he was talking hockey scores. are proposing to avail of open access As the retired chair of the Public to sell power from Muskrat Falls to Utilities Board, and a former board customers in the eastern United States member of Nalcor Energy subsidiary and Canada.

Horizontal directional drilling in the Strait of Belle Isle (winter 2013). Image courtesy of Nalcor

40 1989 - 2014 25 years of publishing excellence When asked if the newly passed The conversation around Muskrat gigawatt hours annually for fi ve years Bill 61 violated the terms of FERC, Falls often boils down to 40-20-40: at the same rate as the Nova Scotia then-minister of Natural Resources, 40 per cent of the power generated Block; and 40 per cent of Muskrat Falls Jerome Kennedy said, “There would will replace thermal generation at power (market-priced energy block), be or could be potential arguments on Newfoundland’s aging Holyrood power which equals 1,200–1,800 gigawatt that but we’ll have to wait and see if plant; the Nova Scotia block of 20 hours until 2041 for a price that ranges they arise.” per cent is in return for building the from fi ve cents per kilowatt hour at the Maritime Link and turning it over to start of the agreement to nine cents at Nalcor in 35 years; and, 40 per cent the end. surplus energy to meet the province’s Vardy explains that this new “20 The view growth in demand or to sell as surplus for 60” principle was the basis on from here power into spot markets in North which the Nova Scotia Utility and Interviewing management staff America. But is that 40 per cent surplus Review Board conditionally approved at Nalcor Energy can be a little like really available to Newfoundland and the EAA application for the 500 MW wrestling a tag team by yourself. Labrador or has it been committed to Maritime Link. Nalcor needed the deal The communications contact, in Nova Scotia? David Vardy believes it is approved to secure a critical federal this case Karen O’Neill (the senior not available. loan guarantee. So, when NSP-ML, the communications advisor for Muskrat In a follow-up email, Vardy writes Emera subsidiary, came back to the Falls), greets you in the main lobby that under the amended Energy Access table to renegotiate the agreement, with a professional smile and a Agreement (EAA), Emera will pay Nalcor had no more cards left to play. handshake. Through the locked doors 20 per cent of the total Muskrat Falls “An attractive rate indeed compared and into a shiny elevator to some fl oor Project cost to a maximum of $1.58 with rates [of more than 21 cents and into a windowless meeting room, billion in exchange for: 20 per cent of per kilowatt hour] to be charged in where Gilbert Bennett, vice president Muskrat Falls power (the Nova Scotia Newfoundland for power coming from for the Lower Churchill Project, shakes block) which equals 1,000 gigawatt the same generation source,” writes hands and sits at the large table. Greg hours annually for 35 years at 15 Vardy. Jones, general manager of energy cents per kilowatt hour; fi ve per cent When Nalcor’s Gilbert Bennett marketing joins us. O’Neill takes the of Muskrat Falls power (supplementary and Greg Jones are asked why head of the table. block) which equals approximately 240 Newfoundlanders will be paying more

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Mar/Apr 2014 atlanticbusinessmagazine.com 41 for power than their Nova Scotian growth in energy demand through its earlier interview, is that the 500 MW counterparts, Jones says something to least-cost power generation strategy. capacity limit of the Maritime Link is the effect of having to be able to pay for Perhaps this dilemma underlies the sized around Muskrat Falls. If it is fully the system. An ability further enhanced enthusiasm with which Jones and loaded delivering purchased power for by Bill 61. Bennett discuss the potential for the Nova Scotia, then how much flexibility Vardy asserts that that commitment system to import power into the island. is there to import power? to Emera poses challenges for Nalcor. Once transmission lines are in place, There’s nothing in the Energy Access If Vardy’s numbers are correct and the Muskrat Falls system will connect Agreement that deals with importing up to 60 per cent of Muskrat Falls is Newfoundland and Labrador to the energy into Newfoundland, but both committed to Emera with the remaining North American power grid and create Jones and Bennett say that one of the 40 per cent required just to replace a power supply loop through which big benefits of the Maritime Link is that the Holyrood Generating Station, it’s electricity can flow to and from Quebec they can import electricity from the difficult to see how Muskrat Falls and Nova Scotia. The difficulty here North American grid into the island can help Nalcor meet the anticipated though, as Vardy pointed out in an when spot market prices are low. “We are in the energy export business,” Jones says, “but our hydro power gives us an export warehouse.” Electricity is difficult to store and has to be available on demand so this could be interpreted as an advantage of hydro generation, assuming the reservoirs have a sufficient flow of water and the transmission lines have the capacity to meet peak demand. When power from the market is cheaper than they can produce it, Nalcor would keep water in the reservoirs and import electricity. Vardy calls this “grasping at straws.” And it does sound like an admission that Muskrat Falls energy won’t be able to compete in an open access market. But, the way Jones explains it, this is a positive. During peak demand, when electricity is at a premium, Nalcor would run the hydro dams at full capacity and sell every surplus kilowatt. This, adds Bennett, will be much easier to manage after 2017 when Muskrat Falls, Churchill Falls, and the other provincial hydro generating stations are operating in concert and connected to the larger national power grid. Are these two different stories? The expensive hole that will never likely see the light of day and the expensive hydro project held up by government as the least-cost way to light the future? Or are they two sides of the same story? Are they manifestations of a yearning to bridge “the wonderful sea” and to continue striving towards the deepest intention of confederation with Canada: to reach out at any expense, including the loss of nationhood, to the neighbours across the sea? to trade provincial rights for an end to isolation? NEW LOCATION 310 Mountain Road 167 Water Street Perhaps it comes down to a matter of Moncton, NB Canada St. John’s, NL Canada priorities. (506) 858-7844 (709) 722-9432

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42 1989 - 2014 25 years of publishing excellence